Shell is exploring for, and appraising light tight oil (LTO) and shale gas in the prospective Vaca Muerta project located in the Neuquén Basin in Argentina.
Shell is the operator in five license blocks in the Neuquén Basin in the western Neuquén province: Cruz de Lorena (Shell 90%), Sierras Blancas (Shell 90%), Aguila Mora (Shell 90%), Bajada de Añelo (Shell 50%) and Coirón Amargo Suroeste (CASO) (Shell 45%). We also have a working interest in two other blocks, operated by Total Austral S.A.: La Escalonada (Shell 45%) and Rincon La Ceniza (Shell 45%). The government has awarded 35-year exploitation concessions for Sierras Blancas, Cruz de Lorena, La Escalonada and Rincon La Ceniza. In September 2017, Shell was awarded 50% working interest and operatorship of the Bajada de Añelo concession in partnership with YPF (50%).
Shell continues to consolidate and develop its existing acreage in the Neuquén Basin as well as look for new acreage. We bring in expertise from our other shale projects in North America to help us drill faster and more efficiently while ensuring the safety of people and the environment. This expertise has enabled us to drill industry-leading best-in-basin wells from both cost and production perspectives. Shell is also investing in supporting oil and natural gas infrastructure in Argentina. In December 2016, we commissioned an early production facility, which has the capacity to process up to 10,000 barrels a day (being upgraded to 12,000 bbl/d) from the Sierras Blancas, Cruz de Lorena and CASO blocks.
|Key Data (2017)||Value|
|Type of Asset||LTO and gas|
Shell puts safety of its staff, contractors and communities first, and will not pursue operations in the Neuquén Basin if they cannot be conducted in a safe and environmentally responsible manner. In our operations, we are committed to Goal Zero - no harm and no leaks. We have stringent safety standards in place covering personal, process and transport safety and expect all our employees and contractors to meet these standards. We work to share best practices, train our staff and strengthen our safety culture. We thoroughly investigate any safety incidents or near-miss events, identify lessons, communicate to staff/contractors and, as appropriate, additional mitigations put in place. Along with commercial and production indicators, Shell’s leadership constantly monitors safety performance across our sites in Argentina.
Shell implements its Onshore Operating Principles, which cover safety and well integrity, air quality, water protection and use, footprint and engagement with local communities. These principles are designed to manage or mitigate impacts related to our operations.Shell is investigating innovative waste treatment and disposal options in its Vaca Muerta project. There are limited waste treatment and disposal options locally, which means that drilling cuttings are transported long distances. To reduce transport-related costs and to ensure the sustainability of our shales operations, Shell has launched a project with the university of Neuquén to investigate biotreatment options. Field trials are expected to start in 2018.
Over the past two years, Shell has invested around $500,000 in social investment projects, focusing on education, health and sports. Shell has sponsored three six-month training programs for unemployed workers in San Patricio del Chañar (Neuquén), an underdeveloped rural area. These programs have focused on skills that are relevant to the oil and gas sector. To date, 424 workers have graduated, of which 35% have secured employment; 25% in the energy sector. We have also implemented entrepreneurial and agricultural training programs. Shell works closely with local communities to design its social investment programs and to ensure our projects, executed with expert help from relevant NGOs or academia, meet their needs.
Throughout the lifecycle of a project, Shell closely engages local communities and interest groups in Neuquén. Together with our stakeholders, we design and implement community engagement strategies for our projects. We conduct and host community engagement sessions before initiating drilling activities. Meanwhile, Shell has a community feedback mechanism in place to enable communities to communicate their concerns and suggestions.